*Communalism is an ideology where people are allegiant to their faith, religion or group and act in its interest rather than nation's. A state having no official religion of its own is a Secular state like India where no religion is favoured by state and all religions are treated equally.

The correct answer is option 'C': The state has no official religion.

Explanation:
Communalism refers to the feeling of loyalty and attachment to one's own religious or ethnic group, often leading to hostility or conflict with other groups. It is a phenomenon that involves the division of society along religious lines, leading to tensions and conflicts within society.

Religion plays a significant role in the development of communalism. However, not all causes of communalism are related to religion. Let's examine the given options to understand why option 'C' is not a cause of communalism:

a) Religion is taken as the basis of the nation:
When religion is made the basis of the nation, it leads to the formation of a religious identity that often excludes or marginalizes other religious groups. This can create a sense of communalism as people prioritize their religious identities over their national identity.

b) When one religion is discriminated against another:
Discrimination against a particular religion, either through social, economic, or political means, can create a sense of grievance and alienation among the targeted religious group. This discrimination can fuel communal tensions and conflicts.

c) The state has no official religion:
This option is not a cause of communalism. In a secular state where there is no official religion, the state does not favor or discriminate against any particular religion. This promotes equality and religious freedom, reducing the chances of communal tensions based on official state endorsement of a specific religion.

d) Demands of one religious group are formed in opposition to another:
When the demands of one religious group are made in opposition to another, it can lead to polarization and conflict between the different religious communities. This opposition can arise due to perceived threats or competition for resources, leading to communal tensions.

In conclusion, option 'C' is not a cause of communalism because a state having no official religion promotes secularism, religious freedom, and equality among different religious communities. It is important to recognize that communalism is a complex issue with multiple causes, including religious identity, discrimination, and competition for resources.